Changing Demographics in the UK and Europe and Its Impact on Business - Report Example

Changing Demographics in the UK and Europe: Issues and Challenges for Business Number and Number Date of Submission Number of Words: 1,600 Executive Summary Due to the significant increase in the annual live births and immigration, this report shows that there is an increasing trend in the number of population throughout the United Kingdom and in Europe. Applicable to UK and Europe, increase in the number of population significantly affects the unemployment rate. Considering the on-going financial crisis around the world, large-scale companies are left with no choice but to implement massive lay-offs and maximize the use of its existing human resources. To prevent work-related stress, each employee should make it a habit to exercise on a regular basis. To decrease the number of unemployed youth, it is necessary to control the inflow of the immigrants. Doing so will provide the youth the opportunity to gain work experiences needed to make the future workforce of UK and Europe more competitive. Table of Contents Executive Summary …………………………………………………….. 2 Table of Contents ……………………………………………………….. 3 I. Introduction ……………………………………………………….. 4 II. Total Population in UK and Europe …………………………… 4 III. Significance of UK and Europe Demographics on Employment ……………………………..................................…. 5 IV. Significance of UK and Europe Demographics on the Local Businesses ……………………….................................…. 7 V. Conclusions and Recommendations …………………………. 8 Appendix I – Population Trend in UK ………………............................. 10 Appendix II – Long-Term International Migration Into and Out of the UK ….............................................................. 11 Appendix III – Grants of British Citizenship: By the Basis of Grant …. 12 Appendix IV – EU 27 Population Change in 2010 ............................... 13 Appendix V – EU 27 Population Change in 2009 ……………………… 14 Appendix VI – People at Risk of Poverty or Social Exclusion (%), 2009 and 2010…………...................................………….. 15 References …………………………………………….........……………….. 16 - 17 Introduction Defined as the “balance of a population especially with regards to density and capacity for expansion or decline” (Merriam-Webster, 2012), demographic composition of a nation includes a wide-range of variables such as gender, age, race, nationality, employment status, location of residences, and home ownership among others. Due to the global economic crisis, the number of people who are unemployed has been increasing over time past few years (Gregory, 2011). Globalization does not only mean removing the barriers on trading but also the movements of the labour forces. This explains why some people view globalization as a great threat on employment. Considering the on-going changes in the demographics of UK and Europe particularly with regards to youth unemployment and the ageing workforce, this report will focus on analyzing how changes in demographics can affect the local business organizations and how demographic data serves as useful information in terms of making important business management decisions. In response to the case of high unemployment rate, Total Population in UK and Europe The trend in UK population is following an upward trend. From 61.8 million, the total population in UK is reported to have reached 62.6 million in 2011 and again to increase up to 64.8 million in 2016 (Beaumont, 2011, p. 3). Other than live births, one of the main reasons why the UK population is continuously increasing is due to the upward trend of immigration (p. 7). In the case of UK, earning British citizenship through residence grant is more common than granting British citizenships to children or through inter-marriage arrangements (p. 9). (See Appendix I – Population Trend in UK on page 10; Appendix II – Long-Term International Migration Into and Out of the UK on page 11; Appendix III – Grants of British Citizenship: By the Basis of Grant on page 12) Similar to the population trend in UK, the population trend in Europe is also following an upward trend. As of the 1st of January 2011, the total population of EU 27 has reached 502.5 million which is 1.5 million higher as compared to the same period of 2010 (eurostat newsrelease, 2011 and 2010). Unlike the case of UK, increase in the number of live births in EU27 increases from 5.353 in 2009 to 5.357 million in 2010. To reduce the risk of social poverty, the EU government has decided to control the number of people who are entering EU through migration. This explains why the net migration in EU27 as of 2010 was 3 million lesser as compared to 2009. (See Appendix IV – EU 27 Population Change in 2010 on page 13; See Appendix V – EU 27 Population Change in 2009 on page 14) Significance of UK and Europe Demographics on Employment Aside from the on-going global financial crisis, the changes that are taking place in the demographics of UK and Europe have a significant impact over its employment rate. Taking a closer look at the long-term international migration into and out of the UK as presented on appendix II, it is clear that the number of people who enters UK through immigration is significantly higher as compared to its emigration (Beaumont, 2011, p. 7). Therefore, with a net migration of 252,000 as of September 2011 (Office for National Staitstics, 2012), the total number of population in UK is constantly rising. As of March – May 2012, the Office of the National Statistics reported that the employment rate in UK was 70.7% whereas the unemployment rate was 8.1% (Office for National Staitstics, 2012). Basically, the high unemployment rate in UK can be explained using the basic law of supply and demand. Due to the on-going financial crisis, the local businesses are being challenged to find ways on how to keep their operational costs down in order to compete with the price offered by other similar businesses in the global markets. This explains why there were some companies that had to implement massive lay-offs (BBC News, 2012a & 2012b). In times of global economic recession, massive lay-offs is one of the most common factors that can decrease the supply of available jobs. Each time large-scale companies implement job cuts, the available pool of labours increases. When computing for the demographic data, statisticians are including the number of immigrants in the total population. It simply means that the number of people who enters UK are expected to be competing with the local people in terms of job hunting. Due to the large pool of available labourers in the UK workforce, employers are more likely to hire individuals who has already gained a lot of work experiences as compared to newly graduates. Over time, this increases the number of unemployed youth in UK. To save a lot of money from unnecessary daily operational costs, a lot of employers are maximizing the use of the available manpower. However, added work load and responsibilities can be very stressful especially on the part of the ageing workforce (Evans, 2011). The same concept applies in the case of Europe. Considering the limited number of available jobs, the continuous increase in the number of population would automatically mean increasing the EU’s risk of having a higher unemployment rate. Likewise, the presence of unemployed youth and the ageing workforce could also mean added challenges on the part of the local businesses. Significance of UK and Europe Demographics on the Local Businesses Maintaining a balance between the number of people and the available job is the key behind a successful economy. As of mid-2012, Antuofermo and Di Meglio (2012) reported that as much as 115.5 million people or 23% of the EU citizens are already at risk of falling below the poverty line. It means that more people will not have the financial means to support their usual household needs. Among the EU member states that are at risk of poverty or social exclusion includes: Bulgaria (42%), Romania (41%), Lithuania (33%), and Hungary (30%) (Antuofermo and Di Meglio, 2012, p. 1). Based on economic theory, whaterver money that each employee receives would eventually go back to the local manufacturers and other types of businesses. There is a close link between being at risk of poverty or social exclusion and high unemployment rate in the sense that a very high unemployment rate would decrease the chance wherein the local business people could earn higher revenues. Applicable in the case of EU 27, a high unemployment rate or a high percentage of at risk of poverty or social exclusion are not considered as a good demographic indicator particularly on the part of the local business people in Bulgaria, Romania, Lithuania, and Hungary. (See Appendix VI – People at Risk of Poverty or Social Exclusion (%), 2009 and 2010 on page 15) With regards to the long-term impact of unemployed youth, the local businesses can be affected in terms of not being able to find the best qualified employees to perform specific and more specialized tasks. For instance, companies like BMW are highly dependent on people who are able to create new automobile designs and machineries that would fit a luxury car. For this reason, BMW cannot anyhow hire incompetent people to join the team. In order to reduce the risk of work-related stress on its ageing employees, BMW will have to invest on additional health prevention costs such as setting-up gyms close to its assembly lines and work stations (Evans, 2011). Conclusions and Recommendations Demographic data are useful in terms of analyzing the future economic success and failure of a country. Since each company plays a significant role in the overall economic success of a country, business people should learn how to analyze these data and be able to apply it directly into the business management of its company. Unemployed youth exists not only in UK but also in EU 27. To lessen the number of unemployed youth, it is necessary on the part of the UK and EU government to control the inflow of the immigrants. By controlling the inflow of immigrants, the government will be able to provide the youth the opportunity to gain work experiences needed to make the future workforce of UK and Europe more competitive. Since there is a continuous inflow of human resources from other countries could threaten the employment opportunities of the local people, the local residents should take the situation as a work motivation. By continuously improving their work-related knowledge and skills, the local residents can have more advantages as compared to the immigrants. With regards to the ageing workforce, the local companies should invest in the promotion of healthy living. Exercise is one of the best and most effective ways to fight work-related stress. By providing the workforce with a place to exercise, the company will be able to maximize the work performance of its ageing workforce. *** End *** Appendix I – Population Trend in UK Source: Beaumont, 2011, p. 3 Appendix II – Long-Term International Migration Into and Out of the UK Source: Beaumont, 2011, p. 7 Appendix III – Grants of British Citizenship: By the Basis of Grant Source: Beaumont, 2011, p. 9 Appendix IV – EU 27 Population Change in 2010 Source: eurostat newsrelease, 2011 Appendix V – EU 27 Population Change in 2009 Source: eurostat newsrelease, 2010 Appendix VI – People at Risk of Poverty or Social Exclusion (%), 2009 and 2010 Source: Antuofermo and Di Meglio, 2012, p. 1 Source: Antuofermo and Di Meglio, 2012, p. 2 References Antuofermo, M. and Di Meglio, E. (2012). eurostat. 23 % of EU citizens were at risk of poverty or social exclusion in 2010. [Online] Available at: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-009/EN/KS-SF-12-009-EN.PDF [Accessed 2 August 2012]. BBC News. (2012a, June 14). Nokia cuts another 10,000 jobs as losses deepen. [Online] Available at: http://www.bbc.co.uk/news/business-18438052 [Accessed 2 August 2012]. BBC News. (2012b , May 30). Blackberry maker RIM warns of loss and job cuts. [Online] Available at: http://www.bbc.co.uk/news/business-18259701 [Accessed 2 August 2012]. Beaumont, J. (2011). Office for National Statistics. Population. Social Trends 41. [Online] Available at: http://www.ons.gov.uk/ons/rel/kpvs/key-population-and-vital-statistics/no--34--2007-edition/index.html [Accessed 2 August 2012]. eurostat newsrelease. (2010, July 27). European demography. EU27 population 501 million at 1 January 2010. More than 5 million children born in the EU27 in 2009. [Online] Available at: http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-27072010-AP/EN/3-27072010-AP-EN.PDF [Accessed 2 August 2012]. eurostat newsrelease. (2011, July 28). European demography. EU27 population 502.5 million at 1 January 2011. More than 5 million children born in the EU27 in 2010. [Online] Available at: http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-28072011-AP/EN/3-28072011-AP-EN.PDF [Accessed 2 August 2012]. Evans, S. (2011, December 20). BBC News. Working out the workforce. [Online] Available at: http://www.bbc.co.uk/news/business-16257072 [Accessed 2 August 2012]. Gregory, M. (2011, December 12). BBC News. Unemployment is worlds fastest-rising fear – survey. [Online] Available at: http://www.bbc.co.uk/news/business-16108437 [Accessed 2 August 2012]. Merriam-Webster. (2012). Demographic. [Online] Available at: http://www.merriam-webster.com/medical/demographic [Accessed 2 August 2012]. Office for National Staitstics. (2012). Key Figures: Labour Market. [Online] Available at: http://www.ons.gov.uk/ons/key-figures/index.html [Accessed 2 August 2012]. Read More